A Newcastle tech firm is planning to pay people up to £600 a year simply by cutting down on their electricity usage.

Start-up company Equiwatt has developed a “smart plug” device that will switch off household appliances for a few minutes, relieving pressure on the National Grid.

During peak periods of electricity consumption the National Grid is forced to activate expensive stand-by power plants to meet the nation’s needs. To avoid having to do this energy providers offer cash incentives to people who reduce their power usage between 6pm and 9pm.

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Equiwatt combines a smart plug with its own artificial intelligence software to automatically switch off its customer’s household devices, allowing them to earn cash.

The company was founded by entrepreneur Johnson Fernandes and Ravneed Kaur, who came up with the idea while studying post graduate degrees at Newcastle University.

Mr Fernandes said: “Our users could earn anywhere between £100 and £600 a year by participating in our services. So £100 would be the minimum they would earn with the start up kit, and with every appliance that they add they could earn a max of £600 per year.

“Currently we are trialling with our customers to find out the best way to make the payments. What we are doing right now is rewarding them with points which they can cash out or they can exchange for vouchers.

“In the future, depending on the association with their energy suppliers, we will also offer them a reduction in their energy bill as well.”

The device can be used to automatically turn off kettles, washing machines and dishwashers.

Equiwatt’s starter-kit can currently only be connected to one device at a time. However, it can also be linked to smart meters to generate more information about the total energy being used in the customer’s home.

The venture has gained support from a number of the region’s top energy experts with Prof Alan Lowdon, the chairman of North East LEP’s innovation board, and Prof Phil Taylor, director of engineering at Newcastle University, both sitting on Equiwatt’s advisory board.

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The company is currently trialling its product across 50 households in the North East but is expecting to increase this to 100 over the next three months. Equiwatt is then looking to grow its trial scheme further to receive more accurate results.

Mr Fernandes added: “The trials are going great. We have got fabulous results in that we are able to provide subsecond response in terms of reduction of an energy load. This criteria meets the balancing needs of the National Grid.

“We are in talks with the industry’s energy networks, as well as energy suppliers, and we are looking to scale this pilot up to 2,00 houses depending on how it works for us.”